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Kindle Notes & Highlights
by
Ramit Sethi
Read between
June 2 - July 21, 2023
Spend extravagantly on the things you love and cut costs mercilessly on the things you don’t.
Sometimes the most advanced thing you can do is the basics, consistently.
If you’re booking travel or eating out, use a travel card to maximize rewards. For everything else, use a cash back card. The card I use for travel and eating out is the Chase Sapphire Reserve. For everything else, I use an Alliant cash back card. And for business, I use a Capital One cash back business card. For extra benefits, I have an Amex Platinum card.
Today, most people pay their credit card bills online, but if you haven’t set up automatic payment yet, log on to your credit card’s website to do so now.
But if you find yourself swamped with the number of cards you have, close the inactive ones. As long as you have good credit, the long-term impact will be minimal and you’ll sleep easier at night with a simple financial system you can easily keep track of.
to consciously spend, which means cutting costs mercilessly on the things you don’t love, but spending extravagantly on the things you do.
Your 401(k) contributions count toward the 10 percent, so if you already participate in a 401(k), you’ll need to add that amount to your take-home money to get a total monthly salary.
They’re the expenses you cringe at, the ones you shrug and roll your eyes at, and say, “Yeah, I probably spend too much on _______.”
She would rather dream about running three times a week than actually run once a week.
These are training wheels. Build the habit first. Systematize it later.
As a fun incentive to myself, if I still had money left over in the account by the end of the year, I’d save half of it—and spend half on something fun.
Instead, whenever I receive money I didn’t expect, I use 50 percent of it for fun—usually buying something I’ve been eyeing for a long time.
After that, however, I strongly encourage you to save and invest as much of it as possible, because once you start getting accustomed to a certain lifestyle, you can never go back.
As Warren Buffett has said, investors should “be fearful when others are greedy and greedy when others are fearful.”
Money makes money, and at a certain point, your money is generating so much new money that all of your expenses are covered. This is also known as being “financially independent” (FI).
